Economists will be looking forward to a slew of economic data this week that will include releases on mining production, inflation and retail sales.
Tuesday sees the release of overall mining production as well as specific data on gold and platinum output for November 2021, which should still show expansion given that the month of measurement falls before the country’s traditional year-end holiday period. The median estimate of Bloomberg’s survey of economists shows mining output is expected to have risen 3.3% in November, up from 2.1% the previous month. However, on a month-on-month basis mining production is expected to contract.
“The robust rebound in global demand driving a significant increase in commodity prices has decelerated,” said Investec economist Lara Hodes. “Moreover, industrial activity remains constrained by persistent supply chain bottlenecks.”
With US inflation at an almost 40-year high and analysts warning of between three and four rate hikes from the Federal Reserve in 2022, all eyes will be on the local consumer price index data for December, which will be released on Wednesday. Annual festive season spending is likely to have pushed up consumer inflation in the final month of the year, adding to pressure on the SA Reserve Bank to continue tightening policy after it raised its repo rate by 25 basis points to 3.75% in November.
Consumer inflation is expected to have accelerated to 5.7% in December, up from 5.5% the previous month, according to the median estimate of Bloomberg’s survey. That would propel SA inflation further above the 4.5% midpoint of the Bank’s 3%-6% target range, adding to the likelihood that local policymakers will continue hiking rates while the US Federal Reserve is expected to start lifting borrowing costs from March.
“The overall risks to the inflation outlook are on the upside in the short term,” said Murendeni Nengovhela, an economist at Alexander Forbes.
Wednesday will also see data released on November retail sales, which are expected to have grown by a modest 2%, up from 1.8% in October, according to Bloomberg’s median estimate. Though one would normally expect retail sales to be supported by early festive season shopping and the usual Black Friday revenue bump, the underlying weakness in the economy and the lingering affect of the pandemic are likely to have undermined retailers’ performance.
“Consumers continue to face financial difficulties, which have been worsened by the pandemic; rising administered prices, particularly electricity and fuel costs continue to dilute limited disposable incomes; while unemployment is at a historical high,” said Hodes.
Friday sees the release of Bloomberg’s January SA economic survey.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.